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Friday, June 29, 2012

Coming Back Soon ... Daily Bell
Feedback. However, both authorization to participate in the discussion and
access to read the feedback will be contingent upon membership in the Internet
Reformation Party's Global Movement for Real Change. Details will be
forthcoming shortly as the Global Movement for Real Change launches here at the
Daily Bell – Home of the Internet Reformation! (Hint: One of many exciting
features to come with your membership to the Internet Reformation Party, is a
FREE webmail account – YourName@theIRP.li. That way, when we are spreading the
word, we do so together and bring a wave of influence to all who offend our
ability to celebrate our individual freedom – memento mori!)

On the one hand, I am pleased with this as I believe the
comments were an important part of what made the Daily Bell valuable (although,
as previously mentioned, my views changed on this over time).

On the other hand, what’s with the membership
requirement? I will wait for the
details. Perhaps it is a way to keep
some of the riff-raff off of the comments section – as I mentioned previously:

The host had a very difficult job –
to try to find a path that allowed the most free-flowing conversation while
still maintaining some sense of integrity in the community.

To do so in an open-access internet forum is quite difficult. The Daily Bell managed to do so for an
exceptionally long period of time. I can
understand the desire to find a way to manage this.

Sadly, the one specific “riff-raff” that caused me to decide
to stop posting will likely be a charter member of this club.

I am looking forward to the details of this membership, and
will watch the postings for a time. Perhaps
I will decide to join again. Whether I do
or not is not a statement on the work Mr. Wile has done – he has created a most
wonderful site that I have found to be very helpful to me in both my education
and in developing my logic and writing skills. I still enjoy visiting the site,
especially on Saturday when Mr. Wile writes his own commentary.

Thursday, June 28, 2012

I will limit my comments on the Supreme Court decision
regarding Obamacare to this one statement by Chief Justice Roberts, in writing
the majority opinion:

In this case, however, it is
reasonable to construe what Congress has done as increasing taxes on those who
have a certain amount of income, but choose to go without health insurance.Such legislation is within Congress's power
to tax.

In place of the words “go without health insurance,” insert
any of the following:

Go without public education

Go without joining the military, Peace Corp, or other
approved community service

Avoid paying state income tax

Own a firearm

Buy a car delivering less than 40 miles-per-gallon / buy a
car with an internal combustion engine

Hold assets overseas

Hold non-US Dollar denominated assets

Buy precious metals

Have more than two children

Live in more than 1500 square feet

Own more than one home

Eat red meat

Avoid taking statins

Avoid annual physical exams

I am sure there are hundreds more.I have limited my universe to items that fall
into areas that could easily be targeted as having a so-called “societal
benefit,” in other words, where the dialogue already makes it easy for the
government to assert a so-called "national benefit."Even here, I am sure there are dozens more.

In a normal world, liability for
committing fraud would be personal, and more than simply forgoing a bonus.

The bank committed fraud.To be clear, human beings with two legs
committed fraud, and other human beings with two legs supervised them.This wasn’t just a poor management
decision.It was an act with the intent
to deceive in order to achieve an economic gain.According to the AP report, the bank
"attempted to manipulate" and made “false reports.”These manipulations and false reports lead to
a gain for someone and a loss for someone else.

Barclays admitted Wednesday that
the actions "fell well short of standards"

Emails and instant messages
disclosed as a result of the investigation cast an unflattering light on the
corporate culture on Barclays' trading floor. The back and forth over fixing
rates included cringeworthy comments like "Done ... for you big boy,"
and "Dude, I owe you big time! Come over one day after work and I'm
opening a bottle of Bollinger."

However, the more dangerous emails
and messages are those demonstrating that the senders knew that what they were
doing was dubious.

"This is the way you pull off
deals like this chicken, don't talk about it too much, 2 months of
preparation... the trick is you do not do this alone ... this is between you
and me but really don't tell ANYBODY," one Barclays trader wrote to a
trader at another bank.

And at least one person willing to state the true nature of
the event:

Former City minister and
ex-chairman of Marks & Spencer Lord Myners told the BBC Wednesday:
"This is the most corrosive failure of moral behaviour I have seen in a
major UK financial institution in my career.

"I think fines and public
criticism will not stop these behaviors. These behaviors will not stop until
the people perpetrating it or responsible for overseeing them face the prospect
of criminal charges and the prospect of going to jail."

If events were as reported, this was fraud.It should be handled as such.

Wednesday, June 27, 2012

NEW YORK (AP) -- Barclays PLC and its subsidiaries have agreed to pay
more than $400 million to settle charges that it attempted to manipulate and
made false reports related to setting key global interest rates.

Isn't manipulation in preparing false reports for a profit considered fraud?

A deception deliberately practiced in order to secure unfair or unlawful gain.

The truth of this settlement will never be known.Who was defrauded and for how much?Who were the individuals who acted to commit
the fraud?Who supervised these
individuals and otherwise approved the actions?

We know two things for certain:

1)The amount of the fine is only a fraction of the
gain realized by Barclays

2)Those who were defrauded will not see a penny of
this money.

Rest assured, management is holding itself accountable:

Barclays President Bob Diamond
also announced he and three senior bank executives were waiving any bonus for
the year as a result of the case.

In a normal world, liability for committing fraud would be
personal, and more than simply forgoing a bonus.

The bank committed fraud.To be clear, human beings with two legs committed fraud, and other human
beings with two legs supervised them.This
wasn’t just a poor management decision.It
was an act with the intent to deceive in order to achieve an economic gain.According to
the AP report, the bank "attempted to manipulate" and made “false reports.”These manipulations and false reports lead to a gain for someone and a loss for someone
else.

Tuesday, June 26, 2012

Article 1, Section 8 grants to Congress the power to declare
war.A formal declaration, as such, has
not been made since the declaration that involved the United States in the
Second World War – first against Japan, then shortly thereafter against Germany
and Italy.Subsequent wars involving the
United States have been “authorized” in other manners, most notably relying on
United Nations resolutions or Congressional resolutions authorizing the
President to decide if and when the U.S. should enter a conflict.

Even regarding World War Two, the formal declaration came
after many months of Roosevelt pursuing military actions against both the
Germans and Japanese – in other words, even though war was formally declared by
Congress, it was declared well after the United States was involved in
hostilities initiated by the President.

The Constitution sets out the minimum requirement for the
United States to enter into hostilities – the Congress, best representing the
people, will decide if entering the fight is worth the cost.

But just because Congress declares war does not make the
fight worth the cost – not to the people.It is in this light that I would like to examine McKinley’s speech to
Congress where he asks Congress for a declaration of war against Spain.

McKinley made this request on April 11, 1898.A little over one week later, Congress
returned with an affirmative reply.On what
basis did McKinley justify this request, and therefore on what basis did
Congress approve?

McKinley spent a good amount of time in his speech
recounting the events of the ongoing war in Cuba, between revolutionaries and
the Spanish government.He recounted
efforts by his predecessor to intercede by means of negotiations and truce.After this, he summarized the grounds for
United States intervention:

First.In the cause of humanity and to put an end to
the barbarities, bloodshed, starvation, and horrible miseries now existing
there, and which the parties to the conflict are either unable or unwilling to
stop or mitigate.It is no answer to say
this is all in another country, belonging to another nation, and is therefore none
of our business.It is specially our
duty, for it is right at our door.

Why is it “no answer to say this is all in another country”?McKinley suggests that because Cuba is “right
at our door,” that this is reason enough.Fortunately, it seems, McKinley would not feel the same if the fight was
further away.

Second.We owe it to our citizens in Cuba to afford
them that protection and indemnity for life and property which no government
there can or will afford, and to that end to terminate the conditions that
deprive them of legal protection.

Is this security for U.S. citizens living overseas only to
extend to countries “right at our door”?

Third.The right to intervene may be justified by
the very serious injury to the commerce, trade, and business of our people, and
by the wanton destruction of property and devastation to the island.

Certainly if individuals living overseas have a right to be
protected by their government via military force, then commercial interests of
citizens living overseas (and domestically) also would fall under the same
umbrella.

Fourth, and which is of the utmost
importance.The present condition of
affairs in Cuba is a constant menace to our peace, and entails on this
government an enormous expense.With such
a conflict waged for years in an island so near us and with which our people
have such trade and business relations; when the lives and liberty of our
citizens are in constant danger and their property being destroyed and
themselves ruined; where our trading vessels are liable to seizure and are seized
at our very door by warships of a foreign nation….

This is more or less a restatement of McKinley’s second and
third point.

He then references the incident of the U.S.S. Maine, stating
that the naval court of inquiry determined it was caused by an external explosion,
without placing the responsibility.Regarding this incident, McKinley reports that Spain has already agreed
to have an impartial board of inquiry investigate this matter, “whose decision
Spain accepts in advance.”It would seem
Spain was desirous to avoid this incident escalating into hostilities with the
U.S.

To summarize, McKinley is asking for authorization to go to
war because the Cuban people are suffering, Americans in Cuba are suffering,
and American business interests in Cuba are suffering.If this is sufficient cause to go to war, it
would seem that there are every year a dozen places or more where the United
States would be justified to intervene.

Non-U.S. citizens living overseas do not fall under the
jurisdiction of the Constitution and the government empowered by it, as sad as
their plight might be.As to U.S.
citizens and businesses overseas, these made decisions to live under the risks of
a jurisdiction that is not the United States.The United States government certainly could employ persuasion and other
non-military means to secure safe passage for such individuals – as Ron Paul
has said, we have thousands of diplomats – put them to work on diplomacy; it is
difficult to identify a Constitutional justification for using the military to
protect individuals living overseas, or business interests in foreign
jurisdictions.

What does all this have to do with today?The President quit going through this
formality seven decades ago, and even then he already began hostile action
before the declaration.

I have a couple of reasons to explore this: 1) I am
curious.As I am reviewing history, I find
even the declared wars were not properly declared, or were declared after
certain provocative actions were taken by the U.S. (even in the case of the
U.S.S. Maine, believing the official story at the time, leads me to ask: Why
was it there?), and 2) whether declared by Congress or the President, the
justifications should be examined.

Again, the reasons cited by McKinley can be used to justify
a dozen wars per year, if the President so chose and the Congress
declared.It would seem a very low
hurdle for these reasons to have persuaded Congress.

Some might look and this and suggest that the fact that the
United States has not entered a dozen conflicts per year demonstrates the
deliberation and discernment of those in power – they can split hairs too fine
for my judgment and not fall into the cause of my concern: that such criteria
is an open door to multiple wars.

I think history demonstrates the opposite to be true.The criteria McKinley used and Congress
accepted are so broad as to allow any intervention wherever those in power wish
to intervene.That they do not chase
every perceived demon is not proof of discernment – splitting hairs.That they left the door so wide open is proof
of a desire of carte blanche – maximum flexibility to become involved if
desired.McKinley and this Congress set
a solid precedent for future political leaders to intervene overseas whenever and
wherever they might choose.

War is the health of the state.Therefore it is also the health of
Congress.Just because Congress declares
war does not justify it.War is
certainly not justified based on the criteria used by McKinley in this case.

Monday, June 25, 2012

Not the state, but the country that has made an enemy of its
large neighbor to the north.

I’ve spent the last several days
re-examining the local banking sector and diving into the numbers, and my
analysis has led me to the conclusion that it’s one of the best capitalized
banking systems in the world.

To give you an example, it’s common
for banks here to hold in excess of 30% of their deposits in CASH. They don’t
loan it out, they don’t invest in stupid government bonds or CDOs… they
actually hang on to their customers’ funds.

I don’t know Simon Black.I have never met him.I wouldn’t know
him if I sat next to him at an airport.

However, I don’t believe any outsider can examine a single
bank, let alone a banking system, and conclude from a look at the numbers that
it is safe.I don’t believe anyone with
significant experience in banking can go to another bank and make such a
determination.I don’t believe a highly
accomplished bank auditor can do this.But Simon Black has.

Just this morning, in fact, I
negotiated a 1-year fixed deposit rate with a local banker on behalf of SMC
subscribers for 10%… in US dollars.

This has flashing red lights written all over it.

1)How will the bank earn enough on deposits to
sustain such a payment?

2)How can the bank earn this amount while
supposedly holding 30% of its customer deposits in reserve? This is over 14% on
invested capital.

We have seen this story before: banks paying the highest
rates for CDs are often the ones having the biggest liquidity crunch; banks
offering deposits in an outside currency get squeezed when the exchange rate
turns against it; the nation behind the bank backstops local currency deposits
but not deposits made in other currencies.

As I said, I don’t know Simon Black.I have enjoyed reading his free daily email,
but this one causes me to consider that his recommendations should be taken with a grain –
or more – of salt.

Ten percent interest income on US Dollars in Georgia. This won't end well for those who take Mr. Black's advice.